FedNat Holding Company (the “Company”) (Nasdaq: FNHC) today
reported results for the three months ended March 31, 2021.
Q1 2021 highlights (as measured against the same three-month
period last year, except where noted):
- Net loss of $19.4 million or $(1.35) per diluted share compared
to net income of $2.1 million or $0.15 per diluted share.
- Adjusted operating loss of $19.4 million or $(1.35) per diluted
share as compared to adjusted operating income of $4.3 million or
$0.30 per diluted share.
- $18.3 million of claims, net of reinsurance recoveries,
pre-tax, from catastrophe losses driven primarily by Winter Storm
Uri ("Uri"), which caused heavy residential damage in Texas, as
previously communicated.
- $174.2 million of gross written premiums, compared to $173.0
million.
- Gross loss ratio, excluding catastrophe losses, of 36.5% and
gross expense ratio of 26.0%, as compared to 38.4% and 25.9%,
respectively, in the first quarter of 2020.
- Combined ratio of 189.0%, up 83.7 percentage points, including
33.0 points of net catastrophe losses in the period.
- $13.6 million of incremental ceded premiums related to
additional excess-of-loss reinsurance purchases and reinstatement
premiums from 2020/2021 treaty year retention events.
- Florida homeowners in-force policies decreased 17.9% to
approximately 197,000, while Florida gross premiums written
increased 0.4%, reflecting continued execution of our strategy to
limit our Florida exposure while increasing revenue per policy,
until rates more accurately reflect increased costs of claims and
reinsurance.
- 6.4% increase in non-Florida homeowners in-force policies to
approximately 149,000, in-line with our geographic diversification
strategy.
- On March 15, 2021, the Company closed an underwritten public
offering of 3,500,000 shares of its common stock for net proceeds
of approximately $15.1 million. Subsequent to the first quarter, on
April 20, 2021, FedNat raised $21.0 million from a convertible
notes offering.
- Non-insurance company liquidity of $71 million at
March 31, 2021.
- Book value per share decreased $3.03, or 26.3%, to $8.50 as
compared to $11.53 as of December 31, 2020, due primarily to a
net loss of $(1.35) per share, issuance of common stock of $1.05
per share and unrealized losses on our fixed-income portfolio of
$(0.50) per share, each for the three months ended March 31,
2021.
Mr. Michael H. Braun, FedNat’s Chief Executive Officer, said
"Our first quarter results were impacted by higher-than-expected
catastrophe losses primarily from Winter Storm Uri which caused
heavy residential damage in Texas in February. I want to thank our
dedicated staff for continuing to demonstrate FedNat’s commitment
to providing our policyholders and partner agents with the highest
quality service in their time of need.”
Mr. Braun continued, “This winter storm was the sixth severe
weather event to impact FedNat since July 1, which has resulted in
challenging times for the Company financially. To meet these
challenges, FedNat took action to conserve liquidity at the holding
company and maintain appropriate capital positions at our insurance
companies. FedNat recently completed two capital raising
transactions which raised gross proceeds of $38 million and
purchased additional reinsurance coverage to help provide more
protection and statutory surplus relief for our insurance
companies. We continue to execute on our initiatives to improve the
profitability of our homeowners business and build long-term value,
including implementation of rate increases in both our Florida and
non-Florida markets and reducing our Florida book of business until
rates are more adequate. Based on the in-force book as of the
fourth quarter of 2020, these rate increases would contribute over
$90 million in incremental gross earned premium in 2021 and over
$230 million of cumulative incremental premium in 2021 and 2022, as
compared to 2020, when fully earned out in the first quarter of
2022. However, these multiple rate increases afford us the
opportunity to hold our total in-force premiums flat while reducing
our total policy counts and total insured values.”
Mr. Braun further added, “Insurance legislation was recently
passed in Florida and now awaits the governor's signature. We are
hopeful that this legislation will slow the persistently increasing
cost of operating in Florida; however, we will remain cautious
until we see evidence of potential benefits over the second half of
2021. In addition, as a result of our continued exposure management
efforts to reduce our property exposures, we expect a reduction in
the total spend on our catastrophe reinsurance program beginning
July 1, 2021 due to our smaller portfolio of business. While we
recognize there is pressure on reinsurance pricing, particularly on
the working layers of our program, our lower anticipated total
reinsurance spend beginning July 1 is a direct result of our
smaller book of business, along with the cost of our recent
subsequent purchases being fully recognized by June 30.”
Revenues
- Total revenue decreased $63.0 million or 54.4%, to $52.7
million for the three months ended March 31, 2021, compared
with $115.7 million for the three months ended March 31, 2020.
The decrease was driven by increases in ceded premiums earned from
incremental quota share agreements and higher catastrophe
reinsurance costs as well as lower net investment income and policy
fees, partially offset by higher investment gains and other income,
all of which are discussed in further detail below.
- Gross premiums written increased $1.2 million, or 0.7%, to
$174.2 million in the quarter compared with $173.0 million for the
same three-month period last year. Overall, Homeowners grew 0.2% as
a result of rate actions that we have taken across our insurance
subsidiaries, offset by our strategic reduction in policies
in-force and exposure in the state of Florida, as a result of the
challenging litigation environment.
- Gross premiums earned increased $3.4 million, or 2.0%, to
$179.0 million for the three months ended March 31, 2021, as
compared to $175.6 million for the three months ended
March 31, 2020. The higher gross premiums earned was primarily
driven by continued non-Florida growth.
- Ceded premiums increased $69.6 million, or 99.9%, to $139.3
million in the quarter, compared to $69.7 million the same
three-month period last year. The increase was driven by
approximately $23 million higher excess of loss reinsurance spend,
as prices and overall property exposures increased this year as
compared to last year. Included in this higher excess of loss
reinsurance spend was $13.6 million of purchased supplemental
coverage to backfill layers and gaps in coverage stemming from the
non-cascading portion of our reinsurance tower and number of
catastrophe events. Furthermore, we had approximately $24 million
of additional ceded premiums related to the 80% quota-share treaty
for FNIC's non-Florida book of business that became effective
during the second half of 2020 and $20 million of additional ceded
premiums related to quota-share treaties for FNIC's Florida book of
business. The increase to ceded premium earned associated with the
aforementioned quota-share treaties is largely offset by
corresponding reductions in loss and LAE, and commission and other
underwriting expenses when comparing the periods.
- Net investment income decreased $2.2 million, or 57.0%, to $1.7
million during the three months ended March 31, 2021, as
compared to $3.9 million during the three months ended
March 31, 2020. This decrease was driven by our smaller fixed
income portfolio as well as a decline in the associated yield as a
result of declining interest rates during the last year.
- Net realized and unrealized investment gains (losses) increased
$2.9 million, to $0.1 million for the three months ended
March 31, 2021, compared to $(2.8) million in the prior year
period. We recognized ($0.1) million and $(3.3) million in
unrealized investment gains (losses) for equity securities during
these respective periods.
- Other income increased $2.6 million, or 50.7%, to $7.9 million
in the quarter, compared with $5.3 million in the same three-month
period last year. The increase in other income was primarily driven
by higher brokerage revenue. The brokerage revenue increase is the
result of higher excess of loss reinsurance spend from the
reinsurance programs in place, including the additional purchases,
during the first quarter of 2021 as compared to the first quarter
of 2020.
Expenses
- Losses and loss adjustment expenses (“LAE”) decreased $20.9
million, or 30.3%, to $48.0 million for the three months ended
March 31, 2021, compared with $68.9 million for the same
three-month period last year. The net loss ratio increased 55.7
percentage points, to 120.8% in the current quarter, as compared to
65.1% in the first quarter of 2020. The higher loss ratio was
primarily the result higher catastrophe net losses as well as
higher ceded premiums, as discussed earlier, which reduces net
earned premiums, the denominator on the net loss ratio calculation,
when comparing the periods. The first quarter 2021 catastrophe net
losses were driven primarily by Winter Storm Uri, which caused
heavy residential damage in Texas, primarily associated with
freezing temperatures causing widespread instances of burst water
pipes. The first quarter 2020 catastrophe net losses were driven
primarily by a number of hail and wind related severe weather
events. These higher catastrophe net losses were partially offset
by higher quota share cessions for both FNIC Florida and
non-Florida during the quarter.
- Our gross expense ratio was 26.0% during the three months ended
March 31, 2021, as compared to 25.9% during the three months
ended March 31, 2020. The net expense ratio increased 28.0%
percentage points to 68.2% in the first quarter of 2021, as
compared to 40.2% in the first quarter of 2020 due primarily to
higher ceded reinsurance premiums in 2021, as discussed
earlier.
- Commissions and other underwriting expenses decreased $15.4
million, or 42.2%, to $21.0 million for the three months ended
March 31, 2021, compared with $36.4 million for the three
months ended March 31, 2020. This decrease was primarily due
to a higher ceding commission driven by the new quota-share
treaties in FNIC's Florida and non-Florida books of business.
Additionally, when comparing these periods, the decrease was
partially offset by higher non-Florida acquisition related costs,
which includes gross commissions, fees and other underwriting
expenses as a result of premium growth.
- Income taxes (benefits) decreased $5.0 million, to $(4.9)
million for the three months ended March 31, 2021, compared to
$0.1 million for the three months ended March 31, 2020. This
decrease is predominantly the result of the pre-tax loss during the
current quarter as compared to income during the first quarter of
2020.
Subsequent Events
- On April 20, 2021, the Company closed on an offering and issued
$21.0 million in aggregate principal amount of Senior Unsecured
Notes due 2026 ("2026 Notes") bearing interest at a fixed rate of
5.0% per year, payable semi-annually. The 2026 Notes are
convertible into shares of the Company's common stock at an initial
conversion rate of 166.6667 shares per $1,000 principal amount of
2026 Notes, equivalent to an initial conversion price of $6.00 per
share.
Non-GAAP Performance Measures
Non United States generally accepted accounting principles
("GAAP") measures do not replace the most directly comparable GAAP
measures and we have included detailed reconciliations thereof on
page 10.
We exclude the after-tax (using our statutory income tax rate)
effects of the following items from GAAP net income (loss) to
arrive at adjusted operating income (loss):
- Net realized and unrealized gains (losses), including, but not
limited to, gains (losses) associated with investments and early
extinguishment of debt;
- Merger and acquisition, integration and other strategic costs
and the amortization of specifically identifiable intangibles
(other than value of business acquired);
- Impairment of intangibles;
- Income (loss) from initial adoption of new regulations and
accounting guidance; and
- Income (loss) from discontinued operations.
We also exclude the pre-tax effect of the first bullet above
from GAAP revenues to arrive at adjusted operating revenues.
Management believes these non-GAAP performance measures allow
for a better understanding of the underlying trend in our business,
as the excluded items are not necessarily indicative of our
operating fundamentals or performance.
Similarly, we exclude accumulated other comprehensive income
(loss) ("AOCI") from book value per share to arrive at book value
per share, excluding AOCI.
Conference Call Information
The Company will hold an investor conference call at 9:00 AM
(ET) Wednesday, May 5, 2021. The Company’s CEO, Michael Braun and
its CFO, Ronald Jordan will discuss the financial results and
review the outlook for the Company. Messrs. Braun and Jordan invite
interested parties to participate in the conference call.
Listeners interested in participating in the Q&A session may
access the conference call as follows:
Toll-Free Dial-in: (877) 303-6913
Conference ID: 6396507
A live webcast of the call will be available online via the
“Conference Calls” section of the Company’s website at FedNat.com
or interested parties can click on the following link:
http://www.fednat.com/investors/conference-calls/
Please call at least five minutes in advance to ensure that you
are connected prior to the presentation. A webcast replay of the
conference call will be available shortly after the live webcast is
completed and may be accessed via the Company’s website.
About the Company
FedNat Holding Company is a regional insurance holding company
that controls substantially all aspects of the insurance
underwriting, distribution and claims processes through our
subsidiaries and contractual relationships with independent agents
and general agents. The Company, through its wholly owned
subsidiaries FedNat Insurance Company, Maison Insurance Company and
Monarch National Insurance Company, is focused on providing
homeowners insurance in Florida, Texas, Louisiana, Alabama, South
Carolina and Mississippi. More information is available at
https://www.fednat.com/investor-relations/.
Forward-Looking Statements
Safe harbor statement under the Private Securities Litigation
Reform Act of 1995:
Statements that are not historical fact are forward-looking
statements that are subject to certain risks and uncertainties that
could cause actual events and results to differ materially from
those discussed herein. Without limiting the generality of the
foregoing, words such as “anticipate,” “believe,” “budget,”
“contemplate,” “continue,” “could,” “envision,” “estimate,”
“expect,” “guidance,” “indicate,” “intend,” “may,” “might,” “plan,”
“possibly,” “potential,” “predict,” “probably,” “pro-forma,”
“project,” “seek,” “should,” “target,” or “will” or the negative or
other variations thereof, and similar words or phrases or
comparable terminology, are intended to identify forward-looking
statements.
Forward-looking statements might also include, but are not
limited to, one or more of the following:
- Projections of revenues, income, earnings per share, dividends,
capital structure or other financial items or measures;
- Descriptions of plans or objectives of management for future
operations, insurance products or services;
- Forecasts of future insurable events, economic performance,
liquidity, need for funding and income; and
- Descriptions of assumptions or estimates underlying or relating
to any of the foregoing.
The risks and uncertainties include, without limitation, risks
and uncertainties related to estimates, assumptions and projections
generally; the nature of the Company’s business; the adequacy of
its reserves for losses and loss adjustment expense; claims
experience; weather conditions (including the severity and
frequency of storms, hurricanes, tornadoes and hail) and other
catastrophic losses; reinsurance costs and the ability of
reinsurers to indemnify the Company; raising additional capital and
our compliance with minimum capital and surplus requirements;
potential assessments that support property and casualty insurance
pools and associations; the effectiveness of internal financial
controls; the effectiveness of our underwriting, pricing and
related loss limitation methods; changes in loss trends, including
as a result of insureds’ assignment of benefits; court decisions
and trends in litigation; our potential failure to pay claims
accurately; ability to obtain regulatory approval applications for
requested rate increases, or to underwrite in additional
jurisdictions, and the timing thereof; the impact that the results
of our subsidiaries’ operations may have on our results of
operations; inflation and other changes in economic conditions
(including changes in interest rates and financial markets);
pricing competition and other initiatives by competitors;
legislative and regulatory developments; the outcome of litigation
pending against the Company, and any settlement thereof; dependence
on investment income and the composition of the Company’s
investment portfolio; insurance agents; ratings by industry
services; the reliability and security of our information
technology systems; reliance on key personnel; acts of war and
terrorist activities; and other matters described from time to time
by the Company in releases and publications, and in periodic
reports and other documents filed with the United States Securities
and Exchange Commission.
In addition, investors should be aware that generally accepted
accounting principles prescribe when a company may reserve for
particular risks, including claims and litigation exposures.
Accordingly, results for a given reporting period could be
significantly affected if and when a reserve is established for a
contingency. Reported results may therefore appear to be volatile
in certain accounting periods.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on
which they are made. We do not undertake any obligation to update
publicly or revise any forward-looking statements to reflect
circumstances or events that occur after the date the
forward-looking statements are made.
Contacts
Michael H. Braun, CEO (954) 308-1322,Ronald
Jordan, CFO (954) 308-1363,Bernard Kilkelly, Investor Relations
(954) 308-1409,or investorrelations@fednat.com
FEDNAT HOLDING COMPANY AND SUBSIDIARIESSelected
Financial Highlights(Dollars in thousands, except per share
data)(Unaudited)
|
|
As of or For the |
|
|
Three Months Ended March 31, |
|
|
2021 |
|
2020 |
|
% Change |
Net Income (Loss)
Attributable to Common Shareholders |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(19,381 |
) |
|
|
$ |
2,133 |
|
|
|
(1,008.6 |
) |
% |
Adjusted operating income
(loss) |
|
(19,415 |
) |
|
|
4,320 |
|
|
|
(549.4 |
) |
% |
|
|
|
|
|
|
|
Per Common
Share |
|
|
|
|
|
|
Net income (loss) -
diluted |
|
$ |
(1.35 |
) |
|
|
$ |
0.15 |
|
|
|
(1,003.4 |
) |
% |
Adjusted operating income
(loss) - diluted |
|
(1.35 |
) |
|
|
0.30 |
|
|
|
(546.8 |
) |
% |
Dividends declared |
|
— |
|
|
|
0.09 |
|
|
|
(100.0 |
) |
% |
Book value |
|
8.50 |
|
|
|
17.15 |
|
|
|
(50.4 |
) |
% |
Book value, excluding
AOCI |
|
8.26 |
|
|
|
16.70 |
|
|
|
(50.6 |
) |
% |
|
|
|
|
|
|
|
Return to
Shareholders |
|
|
|
|
|
|
Repurchases of common
stock |
|
$ |
— |
|
|
|
$ |
6,750 |
|
|
|
NCM |
Dividends declared |
|
— |
|
|
|
1,302 |
|
|
|
(100.0 |
) |
|
% |
|
|
$ |
— |
|
|
|
$ |
8,052 |
|
|
|
(100.0 |
) |
|
% |
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
Total revenues |
|
$ |
52,748 |
|
|
|
$ |
115,699 |
|
|
|
(54.4 |
) |
% |
Adjusted operating
revenues |
|
52,656 |
|
|
|
118,524 |
|
|
|
(55.6 |
) |
% |
Gross premiums written |
|
174,207 |
|
|
|
172,962 |
|
|
|
0.7 |
|
% |
Gross premiums earned |
|
179,002 |
|
|
|
175,574 |
|
|
|
2.0 |
|
% |
Net premiums earned |
|
39,745 |
|
|
|
105,910 |
|
|
|
(62.5 |
) |
% |
|
|
|
|
|
|
|
Ratios to Net Premiums
Earned |
|
|
|
|
|
|
Net loss ratio |
|
120.8 |
|
% |
|
65.1 |
|
% |
|
|
Net expense ratio |
|
68.2 |
|
% |
|
40.2 |
|
% |
|
|
Combined ratio |
|
189.0 |
|
% |
|
105.3 |
|
% |
|
|
|
|
|
|
|
|
|
In-Force Homeowners
Policies |
|
|
|
|
|
|
Florida |
|
197,000 |
|
|
|
240,000 |
|
|
|
(17.9 |
) |
% |
Non-Florida |
|
149,000 |
|
|
|
140,000 |
|
|
|
6.4 |
|
% |
|
|
346,000 |
|
|
|
380,000 |
|
|
|
(8.9 |
) |
% |
FEDNAT HOLDING COMPANY AND
SUBSIDIARIESConsolidated Statement of Operations(In thousands,
except per share data)(Unaudited)
|
|
Three Months Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
Revenues: |
|
|
|
|
Net premiums earned |
|
$ |
39,745 |
|
|
|
$ |
105,910 |
|
|
Net investment income |
|
1,674 |
|
|
|
3,892 |
|
|
Net realized and unrealized investment gains (losses) |
|
92 |
|
|
|
(2,825 |
) |
|
Direct written policy fees |
|
3,315 |
|
|
|
3,466 |
|
|
Other income |
|
7,922 |
|
|
|
5,256 |
|
|
Total revenues |
|
52,748 |
|
|
|
115,699 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Losses and loss adjustment expenses |
|
48,016 |
|
|
|
68,930 |
|
|
Commissions and other underwriting expenses |
|
21,031 |
|
|
|
36,355 |
|
|
General and administrative expenses |
|
6,066 |
|
|
|
6,245 |
|
|
Interest expense |
|
1,926 |
|
|
|
1,915 |
|
|
Total costs and expenses |
|
77,039 |
|
|
|
113,445 |
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
(24,291 |
) |
|
|
2,254 |
|
|
Income tax expense
(benefit) |
|
(4,910 |
) |
|
|
121 |
|
|
Net income (loss) |
|
$ |
(19,381 |
) |
|
|
$ |
2,133 |
|
|
|
|
|
|
|
Net Income (Loss) Per
Common Share |
|
|
|
|
Basic |
|
$ |
(1.35 |
) |
|
|
$ |
0.15 |
|
|
Diluted |
|
(1.35 |
) |
|
|
0.15 |
|
|
|
|
|
|
|
Weighted Average
Number of Shares of Common Stock Outstanding |
|
|
|
|
Basic |
|
14,395 |
|
|
|
14,249 |
|
|
Diluted |
|
14,395 |
|
|
|
14,312 |
|
|
|
|
|
|
|
Dividends Declared Per
Common Share |
|
$ |
— |
|
|
|
$ |
0.09 |
|
|
FEDNAT HOLDING COMPANY AND SUBSIDIARIESSelected
Operating Metrics(Unaudited)
|
|
Three Months Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
(In thousands) |
Gross premiums written: |
|
|
|
|
Homeowners Florida |
|
$ |
111,969 |
|
|
|
$ |
111,547 |
|
|
Homeowners non-Florida |
|
57,909 |
|
|
|
57,942 |
|
|
Federal flood |
|
4,389 |
|
|
|
3,660 |
|
|
Non-core |
|
(60 |
) |
|
|
(187 |
) |
|
Total gross premiums written |
|
$ |
174,207 |
|
|
|
$ |
172,962 |
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
(In thousands) |
Gross premiums earned: |
|
|
|
|
Homeowners Florida |
|
$ |
109,426 |
|
|
|
$ |
116,100 |
|
|
Homeowners non-Florida |
|
64,923 |
|
|
|
55,525 |
|
|
Federal flood |
|
4,713 |
|
|
|
4,136 |
|
|
Non-core |
|
(60 |
) |
|
|
(187 |
) |
|
Total gross premiums earned |
|
$ |
179,002 |
|
|
|
$ |
175,574 |
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
(In thousands) |
Net premiums earned: |
|
|
|
|
Homeowners Florida |
|
$ |
23,091 |
|
|
|
$ |
68,054 |
|
|
Homeowners non-Florida |
|
16,714 |
|
|
|
38,043 |
|
|
Non-core |
|
(60 |
) |
|
|
(187 |
) |
|
Total net premiums earned |
|
$ |
39,745 |
|
|
|
$ |
105,910 |
|
|
FEDNAT HOLDING COMPANY AND SUBSIDIARIESSelected
Operating Metrics (continued)(Unaudited)
|
|
Three Months Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
(In thousands) |
Commissions and other
underwriting expenses: |
|
|
|
|
Homeowners Florida |
|
$ |
12,399 |
|
|
|
$ |
13,827 |
|
|
All others |
|
11,691 |
|
|
|
11,618 |
|
|
Ceding commissions |
|
(19,460 |
) |
|
|
(2,899 |
) |
|
Total commissions |
|
4,630 |
|
|
|
22,546 |
|
|
|
|
|
|
|
Fees |
|
1,335 |
|
|
|
1,114 |
|
|
Salaries and wages |
|
3,572 |
|
|
|
3,598 |
|
|
Other underwriting expenses |
|
11,494 |
|
|
|
9,097 |
|
|
Total commissions and other underwriting expenses |
|
$ |
21,031 |
|
|
|
$ |
36,355 |
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
Net loss ratio |
|
120.8 |
% |
|
65.1 |
% |
Net expense ratio |
|
68.2 |
% |
|
40.2 |
% |
Combined ratio |
|
189.0 |
% |
|
105.3 |
% |
Gross loss ratio |
|
96.3 |
% |
|
113.1 |
% |
Gross expense ratio |
|
26.0 |
% |
|
25.9 |
% |
FEDNAT HOLDING COMPANY AND
SUBSIDIARIESConsolidated Balance Sheet(Unaudited)
|
|
March 31, |
|
December 31, |
|
|
2021 |
|
2020 |
|
|
|
ASSETS |
|
(In thousands) |
Investments: |
|
|
|
|
Debt securities, available-for-sale, at fair value |
|
$ |
411,718 |
|
|
|
$ |
488,210 |
|
|
Equity securities, at fair value |
|
3,106 |
|
|
|
3,157 |
|
|
Total investments |
|
414,824 |
|
|
|
491,367 |
|
|
Cash and cash equivalents |
|
69,694 |
|
|
|
102,367 |
|
|
Prepaid reinsurance
premiums |
|
217,068 |
|
|
|
278,272 |
|
|
Premiums receivable, net of
allowance |
|
40,762 |
|
|
|
50,803 |
|
|
Reinsurance recoverable,
net |
|
439,544 |
|
|
|
413,026 |
|
|
Deferred acquisition costs,
net |
|
23,976 |
|
|
|
25,405 |
|
|
Current and deferred income
taxes, net |
|
38,666 |
|
|
|
35,035 |
|
|
Other assets |
|
41,191 |
|
|
|
32,262 |
|
|
Total assets |
|
$ |
1,285,725 |
|
|
|
$ |
1,428,537 |
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Loss and loss adjustment
expense reserves |
|
$ |
486,713 |
|
|
|
$ |
540,367 |
|
|
Unearned premiums |
|
361,995 |
|
|
|
366,789 |
|
|
Reinsurance payable and funds
withheld liabilities |
|
136,795 |
|
|
|
202,827 |
|
|
Long-term debt, net of
deferred financing costs |
|
98,724 |
|
|
|
98,683 |
|
|
Deferred revenue |
|
6,909 |
|
|
|
7,187 |
|
|
Other liabilities |
|
47,480 |
|
|
|
54,524 |
|
|
Total liabilities |
|
1,138,616 |
|
|
|
1,270,377 |
|
|
Shareholders'
Equity |
|
|
|
|
Preferred stock, $0.01 par
value: 1,000,000 shares authorized |
|
— |
|
|
|
— |
|
|
Common stock, $0.01 par value:
25,000,000 shares authorized; 17,313,461 and 13,717,908 shares
issued and outstanding, respectively |
|
173 |
|
|
|
137 |
|
|
Additional paid-in
capital |
|
184,792 |
|
|
|
169,298 |
|
|
Accumulated other
comprehensive income (loss) |
|
4,186 |
|
|
|
11,386 |
|
|
Retained earnings
(deficit) |
|
(42,042 |
) |
|
|
(22,661 |
) |
|
Total shareholders’ equity |
|
147,109 |
|
|
|
158,160 |
|
|
Total liabilities and shareholders' equity |
|
$ |
1,285,725 |
|
|
|
$ |
1,428,537 |
|
|
FEDNAT HOLDING COMPANY AND SUBSIDIARIESGAAP to
Non-GAAP Reconciliations(Dollars in thousands)(Unaudited)
|
|
As of or For the |
|
|
Three Months Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
Revenue |
|
|
|
|
Total revenues |
|
$ |
52,748 |
|
|
|
$ |
115,699 |
|
|
Less: |
|
|
|
|
Net realized and unrealized investment gains (losses) |
|
92 |
|
|
|
(2,825 |
) |
|
Adjusted operating revenues |
|
$ |
52,656 |
|
|
|
$ |
118,524 |
|
|
|
|
|
|
|
Net Income
(Loss) |
|
|
|
|
Net income (loss) |
|
$ |
(19,381 |
) |
|
|
$ |
2,133 |
|
|
Less: |
|
|
|
|
Net realized and unrealized investment gains (losses) |
|
73 |
|
|
|
(2,132 |
) |
|
Acquisition and strategic costs |
|
(9 |
) |
|
|
(27 |
) |
|
Amortization of identifiable intangibles |
|
(30 |
) |
|
|
(28 |
) |
|
Adjusted operating income (loss) |
|
$ |
(19,415 |
) |
|
|
$ |
4,320 |
|
|
|
|
|
|
|
Income tax rate assumed for
reconciling items above |
|
21.00 |
|
% |
|
24.52 |
|
% |
|
|
|
|
|
Per Common
Share |
|
|
|
|
Book value |
|
$ |
8.50 |
|
|
|
$ |
17.15 |
|
|
Less: |
|
|
|
|
AOCI |
|
0.24 |
|
|
|
0.45 |
|
|
Book value, excluding AOCI |
|
$ |
8.26 |
|
|
|
$ |
16.70 |
|
|
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